Correlation Between Digi International and Okeanis Eco

Can any of the company-specific risk be diversified away by investing in both Digi International and Okeanis Eco at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Digi International and Okeanis Eco into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Digi International and Okeanis Eco Tankers, you can compare the effects of market volatilities on Digi International and Okeanis Eco and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Digi International with a short position of Okeanis Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and Okeanis Eco.

Diversification Opportunities for Digi International and Okeanis Eco

-0.78

Correlation Coefficient

Digi International  Okeanis Eco

Pay attention - limited upside

The 3 months correlation between Digi and Okeanis is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Digi International and Okeanis Eco Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okeanis Eco Tankers and Digi International is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Digi International are associated (or correlated) with Okeanis Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okeanis Eco Tankers has no effect on the direction of Digi International i.e., Digi International and Okeanis Eco go up and down completely randomly.

Pair Corralation between Digi International and Okeanis Eco

Given the investment horizon of 90 days Digi International is expected to under-perform the Okeanis Eco. But the stock apears to be less risky and, when comparing its historical volatility, Digi International is 1.11 times less risky than Okeanis Eco. The stock trades about -0.01 of its potential returns per unit of risk. The Okeanis Eco Tankers is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,734  in Okeanis Eco Tankers on October 3, 2024 and sell it today you would earn a total of  392.00  from holding Okeanis Eco Tankers or generate 22.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	80.1%
Values	Daily Returns

Digi International  vs.  Okeanis Eco Tankers

Digi International

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Digi International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Digi International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Okeanis Eco Tankers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Okeanis Eco Tankers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Digi International and Okeanis Eco

The main advantage of trading using opposite Digi International and Okeanis Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International position performs unexpectedly, Okeanis Eco can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Okeanis Eco will offset losses from the drop in Okeanis Eco's long position.

The idea behind Digi International and Okeanis Eco Tankers pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.